An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
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Monday, June 30, 2014
Sandwichman — "Say's Law sank without trace."
Quote by John Kenneth Galbraith you might want to Evernote.
To understand how Say’s law works (and when and where it doesn’t) ignore everything ever written on the subject, including stuff written by Say. Instead, just imagine what happens when Robinson Crusoe lands on an island where a mini economy already operates: consisting of a few families, and operating a barter system.
Work out how Crusoe manages to find employment. Then add money to the system, which is where the problems start for Say’s law.
To understand how Say’s law works (and when and where it doesn’t) ignore everything ever written on the subject, including stuff written by Say. Instead, just imagine what happens when Robinson Crusoe lands on an island where a mini economy already operates: consisting of a few families, and operating a barter system.
ReplyDeleteWork out how Crusoe manages to find employment. Then add money to the system, which is where the problems start for Say’s law.
Ralph, hoarding of land and goods could also create unemployment in your economy.
ReplyDelete